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The looseness and tightness of overseas investment policy in the recent 13 years: What is encouraged by the regulator? And what is it worried about?

The looseness and tightness of overseas investment policy in the recent 13 years: What is encouraged by the regulator? And what is it worried about?

This is a "brake" action that has been elaborated for half a year.

It is the "Guiding Opinions on Further Guiding and Regulating the Direction of Overseas Investment" (hereinafter referred to as the "Guiding Opinions") that guides this brake action, which was issued by the State Council on August 18 for the purpose of guiding and regulating enterprises in the direction of their overseas investment in the mode of "Encouraging Development + Negative List". It formally clarifies three types of overseas investment activities that China will encourage, restrict and prohibit, and restricts overseas investment in real estate, hotels, film art centers, entertainment, sports clubs and other fields.

On August 24, 2017, Gao Feng, the spokesperson of the Ministry of Commerce mentioned in his declaration about the implementation of the "Guiding Opinions" at the regular press conference: "We will guarantee that overseas investments made by enterprises are maintained stable and long-term; guarantee the smooth development of the 'Belt and Road' initiative, and guarantee national financial and economic security; we will unswervingly adhere to the strategic direction of opening up to the outside world, unswervingly adhere to the strategy of 'going global', and unswervingly adhere to the principle of guarding against overseas investment risks."

The proposal of “Three Guarantees and Three Unwavering Adherence” further clarifies the guidelines of foreign investment regulation. Cui Fan, the Professor from the University of International Business and Economics and Senior Researcher of the China and Globalization Think Tank, told the Economic Observer that the introduction of the “Guiding Opinions” leads regulatory guidelines to have rules to follow and to gradually become clear. On the one hand, it is the further encouragement of the “Belt and Road”; on the other hand, it is to control the risk of capital flight.

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By Courtesy of PE daily

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